1.

You have a bond that you purchased at a discount. The bond has a maturity of 10 years, but is callable in four years. Which will be a higher rate, the YTM or the YTC?

		YTC
		YTM

2.

You have a bond that you purchased at a premium. The bond has a maturity of 10 years, but is callable in four years. Which will be a higher rate, the YTM or the YTC?

		YTC
		YTM

3.

You purchase a bond at a discount that matures in ten years. However, the bond can be called in two years. If you want to maximize your YTM, you will want the bond to be called.

True

False

4.

You have the option between an investment grade bond and a high yield bond. Which one is issued by a company with a lower credit rating?

		Investment Grade
		High-Yield Bond
		Not enough information

5.

The Board of Voyager, Inc. has authorized for sale 10,000 shares of common stock at a price of $40/share.

The company has 6,000 issued shares and has 1,000 shares held in Treasury.

How much money can the company raise in total by issuing new shares of stock?

		$400,000
		$160,000
		$200,000
		$240,000

6.

What is the future value of $25,000 invested for ten years at an 8% APR compounded monthly?

		$52,384
		$55,491
		$55,932
		$56,022